Korean stocks surged over 5% during afternoon trading, with the KOSPI rising 398.31 points (5.46%) to 7690.22 and the KOSDAQ climbing 50.20 points (6.32%) to 844.20. Institutional investors led the rally with net purchases of 1.7896 trillion won in the securities market, while individual and foreign investors sold 1.4811 trillion won and 236.8 billion won respectively. The surge triggered a buy-side circuit breaker at 12:54 when KOSPI 200 futures rose 5.13% above the reference price. Analysts attributed the rebound to recovering sentiment in AI semiconductor investments following Meta's relay investment announcements, which alleviated concerns about capital expenditure cycles.
Circuit Breaker Triggered During Rally
A buy-side circuit breaker was activated in the securities market at 12:54. The KOSPI 200 futures price reached 1240.15 points, recording a 5.13% increase from the reference price of 1179.55 points and sustaining this level for one minute. This marked the 17th buy-side circuit breaker activation this year. The circuit breaker was automatically lifted five minutes after activation.
Institutional Investors Drive 1.78 Trillion Won Net Buying
Institutional investors purchased a net 1.7896 trillion won in the securities market. Individual investors sold 1.4811 trillion won while foreign investors sold 236.8 billion won. Program trading showed net buying of 383.1 billion won combining arbitrage and non-arbitrage trades. Kang Jin-hyuk, senior researcher at Shinhan Investment & Securities, stated that buying momentum is flowing in as AI cycle noise subsides following relay investment news from Meta and others that raised doubts about facility investment. He noted that buying is spreading with rising stocks reaching around 90% in both markets.
National Pension Fund Returns to Strategic Allocation Range
The National Pension Fund's domestic stock ratio stood at 26.3% based on closing prices, according to securities industry analysis. This ratio had risen from 29.9% at the end of May to 31.1% on the 22nd of last month, exceeding the allowable range of 28.8%, but recent declines brought it back within the Strategic Asset Allocation (SAA) allowable range. Yum Seung-joon, researcher at Meritz Securities, explained that the National Pension Fund's mechanical selling pressure is expected to ease.
Major Stocks Post Broad Gains
Market capitalization leaders showed uniform gains. KB Financial rose 10.68%, Samsung Electro-Mechanics gained 7.57%, SK Square increased 7.31%, Samsung Electronics preferred shares climbed 7.11%, Samsung Electronics advanced 6.65%, Samsung Biologics rose 6.04%, Samsung Life Insurance gained 5.67%, SK Hynix increased 3.34%, Hyundai Motor rose 4.60%, and LG Energy Solution climbed 3.67%.
KOSDAQ Market Cap Leaders Show Strong Performance
The KOSDAQ index jumped 50.20 points (6.32%) to 844.20. Institutional investors led with net purchases of 442.5 billion won, while individual and foreign investors sold 324.3 billion won and 117.7 billion won respectively. Top KOSDAQ stocks by market capitalization showed strength: PSK surged 24.44%, Wonik IPS rose 17.64%, Jusung Engineering gained 8.80%, Alteogen increased 8.67%, Leeno Industrial advanced 8.57%, EcoPro BM climbed 9.51%, EcoPro rose 7.30%, Rainbow Robotics gained 7.42%, and Kolon TissueGene increased 3.78%. HLB plunged 29.89% on news of its liver cancer drug failing to receive U.S. FDA approval.
By sector, telecommunications equipment, conglomerates, construction, and electrical equipment surged 8-10%, with most sectors showing strength. However, credit cards and healthcare equipment and supplies sectors showed weakness.
FAQ
What caused Korean stocks to surge over 5% during trading?
Institutional investors drove the rally with net purchases of 1.7896 trillion won, supported by recovering sentiment in AI semiconductor investments following Meta's relay investment announcements.
What is the National Pension Fund's current domestic stock allocation ratio?
The National Pension Fund's domestic stock ratio stood at 26.3% based on closing prices, returning to within the Strategic Asset Allocation allowable range of 28.8% after recent market declines.
Which major Korean stocks showed the strongest gains?
KB Financial rose 10.68%, Samsung Electro-Mechanics gained 7.57%, SK Square increased 7.31%, and Samsung Electronics preferred shares climbed 7.11%, with most major stocks posting gains between 3-10%.
